SarkariPYQ

SSC GD 2023 PYQ — Question 27

SSC GD Constable (English) - 6 Feb 2023 - Shift 3 • General Awareness • Q27

Back to paper

Loans create _____, as they have to be returned to the lender in a certain period of time.

Show answer & explanation

Correct answer: D

Explanation

The correct answer is option 4 i.e. Liability.

  • Loans are taken to meet expenses or to create assets which cannot be funded by regular income.
  • Loans create liability as they have to be returned to the lender in a certain period of time. 
  • A liability leads to cash outflow from the future income for the repayment of the loan and the interest, thereby leaving lesser amount for future expenses and savings.